Key takeaways:
- The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, permanently extended pre-deductible telehealth coverage for Health Savings Account (HSA) compatible plans and expanded HSA eligibility to include Affordable Care Act (ACA) Exchange bronze and catastrophic plans starting in 2026.
- Direct Primary Care Service Arrangements (DPCSAs) can now coexist with HSA eligibility, provided monthly fees do not exceed $150 per individual (or $300 for families), and arrangements cover only primary care services.
- A proposed rule would eliminate Medicare Part D creditability reporting requirements for Health Reimbursement Arrangements (HRAs) and Individual Coverage HRAs (ICHRAs), reducing administrative burden for employers and benefits administrators.
- IRS Notice 2026-05 clarifies how these OBBBA provisions apply in practice, giving HR teams clearer guidance on plan design, contribution eligibility, and reimbursement rules for 2026 and beyond.
What did IRS Notice 2026-05 clarify for 2026 planning?
Recent federal actions have brought significant changes to employee benefit plans, notably HSA contribution rules and Health Reimbursement Arrangements (HRAs).
IRS Notice 2026-05, by way of background
On December 9, 2025, the IRS issued guidance (IRS Notice 2026-05)1 that clarified provisions of the One Big Beautiful Bill Act (OBBBA) that are noteworthy as HealthEquity's members and clients plan for 2026.
The OBBBA, enacted in July 2025, introduced several changes affecting HSAs, including:
- A permanent safe harbor for pre-deductible telehealth and remote care
- The designation of ACA Exchange bronze and catastrophic plans as HSA-compatible
- Clarification that qualifying Direct Primary Care Service Arrangements (DPCSAs) do not disqualify individuals from HSA eligibility
The following sections address how this guidance affects HSA eligibility, plan design considerations, and reimbursement treatment.
Telehealth and remote care services: what's allowed and what's not allowed?
Individuals enrolled in an HSA-compatible high-deductible health plan (HDHP) may contribute to their HSAs for 2025 if their HDHPs provided pre-deductible telehealth or remote care services prior to OBBBA's July 4, 2025 enactment date. Such contributions can be made before or after July 4, 2025.
For clarity, here's what the guidance allows, and what it does not:
What's allowed
- Contributions for 2025 if pre-deductible telehealth or remote care happened before July 4, 2025
- Contributions made either before or after July 4, 2025
- IRS reliance on the Department of Health and Human Services (HHS) annual list of telehealth services payable by Medicare2
What's not allowed (before the deductible is met)
- In-person services
- Medical equipment or drugs provided alongside telehealth or other remote care, unless they qualify as telehealth services under current guidance
Which bronze and catastrophic plans are now considered HSA-compatible?
Beginning in 2026, bronze and catastrophic plans purchased through an ACA Exchange will be treated as HSA-compatible, even if they do not otherwise satisfy the HDHP minimum deductible and out-of-pocket maximum requirements.
Bronze and catastrophic plans purchased off-Exchange will also be treated as an HDHP if the same plan is available as individual coverage through an Exchange, or if an individual reasonably believes that coverage is available on an Exchange.
Employer-sponsored Individual Coverage HRAs (ICHRAs) or Qualified Small Employer HRAs (QSEHRAs) may be used to purchase these bronze and catastrophic plans without impacting HSA compatibility.
What are the DPCSA rules, and how can you help employees stay HSA-eligible?
DPCSAs can work with HSAs, but the rules are specific. To maintain HSA eligibility, total monthly fees for all DPCSAs covering an individual cannot exceed $150 per month for an individual, or $300 per month if the arrangement covers more than one person. These limits will be adjusted for inflation after 2026.
The guidance also emphasizes that the DPCSA should operate on a fixed periodic fee structure, and it outlines limits around what services the arrangement can include.
DPCSA eligibility limits at a glance
| Requirement | What the guidance says |
|---|---|
| Monthly fee limit | Total monthly fee for all DPCSAs cannot exceed $150 for an individual, or $300 if the arrangement covers more than one person. Limits adjust for inflation after 2026. |
| How members pay | The only payment for care under a DPCSA should be the fixed periodic fee. |
| Additional billing | Members who pay the fee cannot be separately billed for additional items or services through insurance or other means. |
| Prepaying | Fees may be billed for periods longer than a month, up to one year, as long as the total does not exceed the monthly limit when averaged out. |
However, DPCSAs may offer and bill for certain services outside the arrangement, regardless of membership status.
Additionally, DPCSA fees do not count toward the HDHP's annual deductible or out-of-pocket maximum.
Can HSAs reimburse DPCSA fees, and what pitfalls should you avoid?
For DPCSA fees to be reimbursed from an HSA, the arrangement must provide only primary care services from primary care practitioners, as defined in the guidance, and the sole compensation must be a fixed periodic fee. The care must not include prohibited services or items.
While there is no specific dollar limit for HSA reimbursement, paying DPCSA fees above the monthly eligibility limit will make the individual ineligible to contribute to an HSA during that time. The guidance also clarifies when DPCSA expenses are considered incurred and therefore reimbursable, and notes that HSAs cannot reimburse fees paid by an employer, including those paid through cafeteria plan salary reductions.
What's changing for Medicare Part D reporting requirements for HRAs?
On November 28, 2025, the HHS Center for Medicare and Medicaid Services (CMS) issued a proposed rule3 that would eliminate the long-standing requirement for employers and administrators of HRAs to report whether their coverage is "creditable" for Medicare Part D purposes.
The proposed rule would remove this reporting requirement for HRAs and ICHRAs, while maintaining it for group health plans that directly offer prescription drug benefits.
CMS notes that this update aligns with efforts to reduce regulatory burdens and streamline compliance and is responsive to feedback from organizations seeking relief from these notice requirements. CMS has issued a Request for Information concerning this proposed rule; the comment period ends January 26, 2026.
What should you do next to prepare for 2026?
You do not need a complete benefits overhaul to respond to these changes. You do need a clean, coordinated update across plan design, communications, and vendor processes.
A focused next-step checklist:
- Confirm how your HDHP telehealth coverage aligns with the clarified treatment.
- Update decision-support content for 2026 plan shopping, especially for ICHRA and QSEHRA groups considering bronze or catastrophic coverage.
- Add a DPCSA eligibility explainer and escalation path for employee questions.
- Monitor the HRA Medicare Part D proposed rule, and map the operational impact if finalized.
Well-timed updates can meaningfully simplify compliance and enhance employee confidence at the same time.
Frequently Asked Questions
References and disclosures
This information is provided for general informational purposes only and does not constitute legal or tax advice. Employers and plan sponsors should consult their legal or benefits advisors regarding the applicability of this guidance to their specific facts and circumstances.
1Expanded Availability of Health Savings Accounts under the One, Big, Beautiful Bill Act (OBBBA)
2https://www.cms.gov/files/zip/list-telehealth-services-calendar-year-2026.zip
